Investor frenzy drives European startup valuations to new heights in AI and defense sectors

As investor interest surges, valuations of European startups focused on artificial intelligence (AI), fintech, and defense are rapidly climbing.

According to sources close to the matter speaking to the Financial Times (FT), AI voice startup ElevenLabs is in discussions to sell employee shares at a valuation exceeding $6 billion. This figure represents double the company’s valuation from its most recent funding round in January.

Groups such as Swedish “vibe-coding” startup Lovable and German software firm n8n have also encountered intense investor interest in recent weeks.

French AI group Mistral is conducting discussions to raise new funding at approximately $10 billion valuation—nearly double last year’s level—from investors including Dutch chip production equipment supplier ASML, according to sources familiar with the negotiations.

This development emerges as investors globally queue up to support rapidly growing AI companies amid the latest technology boom environment.

This situation has led to a series of major fundraising deals particularly in the US this year. While OpenAI is in the process of raising $40 billion in funding from investors led by SoftBank, Anthropic completed an expanded $13 billion round this week, bringing its valuation to $170 billion.

“FOMO [Fear of missing out] has definitely returned. We’ve started seeing large growth rounds in Europe that we haven’t witnessed in the past few years,” said Alex Lim, general partner at venture capital (VC) firm IVP.

According to Dealroom data, VC investments in Europe have recovered following a three-year contraction and could reach their highest total level this year, excluding the boom years of 2021 and 2022.

European venture capital deals are projected to increase by 3% to 4% in 2025, reaching $57 billion, approximately matching the 2023 total.

Alongside this increase, some AI companies are evaluating incoming investment offers, while other technology ventures have expanded their fundraising rounds or accelerated their next rounds to capitalize on heightened activity.

Last week, the FT reported that Lovable saw interest that would more than double the company’s valuation to over $4 billion. German firm n8n witnessed its valuation rise from €300 million in March to $2 billion in a new round led by Accel.

Amsterdam-based no-code website building platform Framer also secured new funding at a $2 billion valuation in recent weeks through a deal led by Meritech and Atomico.

Defense technology groups are also attracting attention, supported by European governments’ commitments to increase defense spending as the US distances itself from the continent.

In Germany, drone startup Quantum Systems is conducting fundraising discussions at a €3 billion valuation, according to sources familiar with the matter.

UK-based Cambridge Aerospace raised $100 million in funding, establishing the company’s valuation at approximately $400 million.

Meanwhile, British fintech group Revolut granted employees permission this week to sell some shares at a $75 billion valuation—nearly double last year’s valuation.

“We’re in the midst of a major global technological transformation… the UK and Europe are fortunate to host some companies that will be part of this wave,” says James Wise, partner at London-based Balderton Capital.

However, European AI companies still lag significantly behind US leaders in both fundraising and commercialization.

OpenAI, with its $300 billion valuation, ranks among the world’s most valuable private technology companies and is currently in discussions with investors about a secondary share sale that would raise its valuation to $500 billion.

According to Jeannette zu Fürstenberg, European head of General Catalyst, the rising valuations and increased activity reflect the magnitude of the opportunity.

“We’re definitely slower,” Fürstenberg acknowledges, but argues that Europe is “really trying to catch up” and seeking “meaningful ways to capture some of this productivity.”